Canada household debt-to-income ratio keeps rising in first quarter

Reuters Staff

1 Min Read

(Reuters) - The ratio of Canadian household debt-to-income, of great concern to the Bank of Canada, continued rising in the first quarter, to 152.0 percent from 150.6 percent in the fourth quarter of 2011, Statistics Canada said on Friday.

One day earlier, the Bank of Canada had said in its Financial System Review that the elevated level of household indebtedness continues to be the most important domestic risk to financial stability. It said the fourth quarter figure was already higher than the level in the United States and Britain.

The central bank also predicted on Thursday that though the pace of debt accumulation was moderating, the ratio would continue to grow over the medium term.

The rise in the ratio occurred as Canadians’ credit market debt grew faster than their personal disposable incomes over the quarter.

National net worth rose 2.0 percent in the first quarter to C$6.72 trillion ($6.59 trillion) from C$6.59 trillion in the fourth.